India orders probe into $750m Finmeccanica helicopter deal

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NEW DELHI (AP) — India’s top investigative agency is looking into the role a former air force chief played in a $750 million helicopter contract marred by reports of bribery.

Pic: AP.

Shashi Tyagi and three of his cousins are among 11 people and two companies at the center of a preliminary inquiry announced Monday by the Central Bureau of Investigation. The CBI, India’s equivalent of the FBI, is investigating whether kickbacks were paid to steer the contract to Italian defense group Finmeccanica’s helicopter division, AgustaWestland.

The inquiry is based on documents that Indian investigators received from Italian authorities following the arrests two weeks ago of Giuseppe Orsi, the CEO of Finmeccanica, and Bruno Spagnolini, the chief of AgustaWestland, in Italy on charges that they paid bribes in India.

The inquiry is the first formal step by Indian investigators into allegations that bribes clinched the purchase of 12 helicopters two years ago. India’s defense ministry received three of the helicopters in December but has placed the rest of the contract on hold.

People to be questioned by the bureau include Tyagi, his cousins, Orsi and Spagnolini. Tyagi, who led the air force from 2005 until his retirement in 2007, has said he is innocent.

The agency said it would also investigate allegations that three middlemen channeled illegal payments through Tunisia and Mauritius to two India-based companies. Those companies and two Indian men associated with them also are under investigation.

Only after the agency completes questioning the suspects and gathering evidence can it pursue criminal cases.

India is expected to spend $80 billion over the next 10 years to upgrade its military. It has become the world’s top arms and defense equipment buyer in recent years due to its concerns about China’s growing power in the region and its traditional rivalry with neighbor Pakistan.

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